* Palladium hits highest since Sept 2014
* Gold, yields gain on slower U.S. jobs growth
* Gold headed for fourth week of gains
(Adds comments, milestones, NEW YORK dateline; updates prices)
By Devika Krishna Kumar and Zandi Shabalala
NEW YORK/LONDON, June 2 Gold prices rose to a
six-week high on Friday after disappointing U.S. non-farm
payrolls data weighed on the dollar and lowered some
expectations for more aggressive U.S. interest rate increases
Data showed that U.S. job growth slowed in May and
employment gains in the prior two months were not as strong as
previously reported, suggesting the labor market was losing
A slow recovery in the world's biggest economy dents the
likelihood for higher interest rates which benefits non-interest
yielding and safe-haven gold.
Spot gold was up 1 percent at $1,277.76 per ounce by
3:34 p.m. EDT (1934 GMT), after hitting its highest since April
21 at $1279.10 and was headed for its fourth week of gains.
U.S. gold futures ended the session up 0.8 percent
at $1,280.20 an ounce.
"You had that non farm payrolls number that surprised
everyone so at this point it looks like the market wants to
continue higher," said Joshua Graves, markets strategist at RJO
"I feel like $1,300 is probably going to be the next stop
... At this point with the market getting a little bit toppy up
here, I think you're seeing a little bit of a flight to safe
Expectations for stronger jobs data and upbeat data from
U.S. factory activity had pushed gold to a one-week low earlier
"There is good room to fall back to $1,200 within the next
three months," Dominic Schnider at UBS Wealth Management in Hong
"The world economy is still in good shape, people are
risk-on, inflation is leveling off, there is no real big
inflation threat anymore, policy is normalising still."
However, the upcoming June 8 elections in Britain and more
political unrest possible in the U.S., North Korea, Greece,
Venezuela, and Brazil is likely to keep bids in bullion, seen as
a safe haven asset, analysts said.
Polls have shown varying likelihoods of British Prime
Minister Theresa May winning the election. The latest polls all
show the Conservatives' lead narrowing, but the advantage ranges
from three to 12 points, causing uncertainty in markets.
In other markets, U.S. stocks advanced to record levels for
a second straight session while the dollar dropped to
seven-month lows, making gold less expensive for holders of
Among other precious metals, palladium was up 2
percent at $839.75 an ounce after earlier touching $843.10, its
highest level since September 2014.
Silver rose 1.7 percent to 17.54 per ounce after
hitting a more than one-month high while platinum firmed
2.4 percent to $949.60, but poised to end the week lower.
The rise in prices also boosted chances that the precious
metals share index, Philadelphia SE Gold/Silver Index
would have its own upside breakout. The XAU index was up 0.6
percent and looked to attack its own resistance.
(Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Marguerita Choy and Jane Merriman)